Auto parts manufacturer ArvinMeritor Inc. is divesting its Wheels business, but says it intends to become a global supplier of commercial vehicle parts for on- and off-highway original equipment and aftermarkets.
ArvinMeritor is planning an investment of up to $10 million in its commercial vehicle business in Brazil, to expand into new product segments and new manufacturing technology. Examples of these include advanced gear-making and new equipment to produce parts and components.
Chairman, CEO, and president Chip McClure said the group is “always exploring new opportunities that will meet our customers’ needs. With the right products and a dedicated and talented workforce, ArvinMeritor will continue to be a strong commercial vehicle supplier in Brazil and across the continent.”
The company has an agreement to sell its Wheels business to Iochpe-Maxion, a Brazilian producer of wheels and frames for commercial vehicles, railway freight cars, and castings by the end of 2009. The value of reported to be $180 million.
Iochpe-Maxion will gain a plant in Brazil’s Sao Paulo state that produces about 14 million motor vehicle wheels annually; a wheel plant in San Luis Potosi, Mexico, producing 6 million wheels per year; and a North American engineering and sales arm.
The acquisition is pending approval by Anti-trust authorities in Brazil and the U.S., plus Iochpe-Maxion shareholders, have yet to approve the sale.
“Iochpe-Maxion approached us about acquiring this asset and we determined that selling it was in the best interest in terms of ArvinMeritor’s strategy and the Wheels businesses’ long-term growth,” explained McClure. “This new owner will invest in Wheels and the valuable, talented people who support it.”
ArvinMeritor Wheels operates manufacturing facilities in Limeira, Brazil and San Luis Potosi, Mexico.
Earlier this year, after it was unable to sell its Light Vehicle Systems business, ArvinMeritor restructured the business as the Wheels, Body Systems, and Chassis Systems divisions.
The Body Systems business is still part of the ArvinMeritor portfolio, but McClure said the group would sell that business “when market conditions support such actions.”
ArvinMeritor to Divest Wheels Business
Plans to invest focus on on-, off-highway markets